In this article, we explore the 10 Best Railroad Stocks to Buy According to Analysts.
The United States and Canada, two countries that form the North American region, have been running on railroads for nearly 200 years. Railroad emerged as an industry in the late 1820s and still supports the region’s economy to date. The US in particular has nearly 140,000 route miles of freight logistics network, which moves about 28% of all domestic freight by ton-miles. It is also widely considered the world’s largest, safest, and most cost-efficient freight system, per the Federal Railroad Administration, or FRA. The FRA also notes that the nearly $80 billion industry is anchored by seven Class I railroads alongside more than 600 regional and short-line operators. This transportation network is supported by the railcar sector, which brings together the manufacturing, leasing, and maintenance of the rolling stock that keeps North American supply chains moving.
Data from the Association of American Railroads, or AAR, indicates that rail volumes increased markedly in 2025. For the week ended May 10, total US rail traffic rose 5.7% year over year, the data shows. That momentum extended into early 2026, where the total US carloads averaged 224,737 per week in February. In fact, noted AAR in this March’s Rail Industry Overview, this is the most carload for any February since 2019 and up 6.5% over the same period last year. The number of railcars in storage also fell by nearly 18,000 that month, their first decline in six months. According to AAR, this is evidence that freight demand may be strengthening enough to pull idled equipment back into service.
However, not all signals are positive. For instance, a December 2025 Reuters investigation found that US freight railroads emitted approximately 485,000 tons of nitrogen oxides in 2024. This surpassed the combined output of all coal-fired power plants in the country. The underlying cause is an aging locomotive fleet with an average age now approaching 28 years, up from roughly 20 years in 2000, said Reuters. The analysis added that the EPA estimates rail pollution contributes to approximately 3,100 premature deaths and $48 billion in annual healthcare costs. This is a liability that both regulators and lawmakers are increasingly focused on, Reuters stated.
Yet the economic catalysts for rail’s next growth phase are firming. For starters, the ISM Manufacturing PMI reached 52.4% in February, which is its second straight month above the 50% expansion threshold. The PMI exceeded this level only once in the prior 38 months. The other catalyst is that the US manufacturing output in January hit its highest point since October 2022, according to the AAR’s March 2026 overview. Also, the USDA has projected record US corn exports this year, which will add a direct tailwind for grain-related rail volumes.
The bottom line is that freight demand is strengthening and manufacturing activity is stirring back to life. Don’t forget key macroeconomic indicators that are showing more support than before. Against this background, investors may want to take a closer look at the railroad stocks analysts believe are best positioned to capitalize on the industry’s next phase of growth.
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Our Methodology
To compile our list, we used financial media sources and transportation ETFs with significant exposure to the rail sector, including the iShares US Transportation ETF (IYT) and the SPDR S&P Transportation ETF (XTN), to build an initial pool of railroad operators and railcar companies listed in the United States. From this pool, we filtered for stocks with a positive analyst consensus upside potential as of March 18, 2026. We also considered institutional interest in each stock using hedge fund holdings data from Insider Monkey’s 13F database, as of Q4 2025. The final list is ranked in ascending order based on upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best Railroad Stocks to Buy According to Analysts
10. CSX Corporation (NASDAQ:CSX)
Stock Upside: 1.72%
Number of Hedge Fund Holders: 75
CSX Corporation (NASDAQ:CSX) is one of the best railroad stocks to buy according to analysts. On March 17, Maryclare Kenney, Chief Commercial Officer of CSX Corporation, presented at the JPMorgan Industrials Conference, where she laid out the company’s near-term challenges, its resilience strategy, and key growth projects.
Kenney opened by addressing recent weather-related disruptions to CSX’s network. She stated that the company is investing in network resiliency to ensure faster recovery and sustained service reliability. This is because, as she emphasized, shippers only choose rail over trucks when they trust the service to be consistent, not just good occasionally.
Kenney stated that on the demand side, CSX entered 2026 expecting a flat industrial production environment, and that view has not changed. She noted that the company faces two major headwinds: the housing and automotive markets, where mill and plant closures that began in 2025 are still dragging on volumes. This is a weight Kenney said CSX expects to carry through Q3 2026 as it laps those closures. Aluminum shortages in the automotive supply chain are adding to that pressure, she added.
On the brighter side, Kenney stated that US infrastructure investment is lifting demand for aggregates and cement, and that this is flowing through CSX’s minerals segment. However, she added a caveat that this segment is a lower revenue-per-unit category compared to chemicals and forest products.
CSX Corporation is a US freight rail company. It operates more than 21,000 route miles across 23 states, the District of Columbia, and two Canadian provinces. It transports coal, chemicals, agricultural products, automobiles, and consumer goods.
9. The Greenbrier Companies, Inc. (NYSE:GBX)
Stock Upside: 5.42%
Number of Hedge Fund Holders: 30
The Greenbrier Companies, Inc. (NYSE:GBX) is one of the best railroad stocks to buy according to analysts. On February 4, Greenbrier Companies, Inc. completed a $300 million railcar asset-backed securities (ABS) offering through GBX Leasing 2022-1 LLC. GBX Leasing is the company’s indirect wholly-owned special purpose subsidiary. The company issued Series 2026-1 Class A and B Notes to secure long-term financing for its leasing business.
The Notes carry a blended interest rate of 5.2% and feature a 2.5-year call provision. They also have weighted average lives of about 6.7 years for the Class A Notes and seven years for the Class B Notes. According to the company, the securities received ratings of “AA” and “A” from S&P Global Ratings.
The company detailed that the ABS issuance is secured by railcars and associated operating leases from its leasing fleet. This fleet consists of over 17,000 railcars originating primarily from the company’s manufacturing operations.
Although the securitization will be consolidated on Greenbrier’s balance sheet for accounting purposes, the debt is non-recourse to the parent company. Put simply, Greenbrier is not liable for repayment beyond the pledged collateral. Proceeds from the offering will support Greenbrier’s leasing business and recurring revenue stream.
Lorie L. Tekorius, Greenbrier’s CEO and President, noted that the strong investor demand signals confidence in the durability of the company’s manufacturing platform. The enthusiasm also aligns with the company’s disciplined long‑term strategy to grow the leasing business, Tekorius said.
The Greenbrier Companies, Inc. is an American transportation manufacturing corporation. It designs, builds, refurbishes, and leases freight railcars. This includes tank cars, boxcars, gondolas, and intermodal equipment, with operations across North America, South America, Europe, and parts of Asia.
8. Norfolk Southern Corporation (NYSE:NSC)
Stock Upside: 8.13%
Number of Hedge Fund Holders: 81
Norfolk Southern Corporation (NYSE:NSC) is one of the best railroad stocks to buy according to analysts. On March 17, Norfolk Southern Corporation presented at the JPMorgan Industrials Conference 2026. Company President and CEO Mark George and Executive Vice President and CFO Jason Zampi took the opportunity to detail the company’s Q1 performance, winter storm recovery, and strategic initiatives including the potential Union Pacific merger.
According to the presentation, the company had a strong start to the year in January. The company reported “satisfactory” volumes before being significantly impacted by three successive winter storms and deep freezes in February. Despite the severe weather disruption, Norfolk Southern was resilient enough to return to normal operations in March, the executives said. Specifically, the CEO expressed optimism about the company’s recovery trajectory.
The CEO also highlighted the potential merger with Union Pacific as a strategic opportunity. If completed, the merger will create a seamless single-line service that would enhance competitiveness and enable transcontinental railroad capabilities, George stated.
He added that technological investments remain a priority. In this regard, the company is continuing to modernize its locomotive fleet; for instance, over 70% now feature AC technology. They are also exploring artificial-intelligence applications to optimize train plans and improve decision-making processes across operations.
The executives also noted that the company implemented a new commercial organization structure. It features specialized sales teams designed to better serve customer segments and drive top-line growth through more focused market approaches. At the same time, the CEO revealed a new partnership with Warrior Met Coal, which is expected to generate roughly 6 million tons of annual volume.
Norfolk Southern Corporation is a US freight rail company. It operates approximately 19,100 route miles across 22 states and the District of Columbia, and transports products such as coal, chemicals, agricultural goods, metals, and automotive parts.
7. Trinity Industries, Inc. (NYSE:TRN)
Stock Upside: 9.84%
Number of Hedge Fund Holders: 21
Trinity Industries, Inc. (NYSE:TRN) is one of the best railroad stocks to buy according to analysts. On March 5, Trinity Industries, Inc. declared a quarterly cash dividend of $0.31 per share. The payout will be distributed on April 30, 2026, to shareholders of record as of April 15. This payment is the company’s 248th consecutive quarterly dividend payment and extends a 56-year unbroken dividend streak.
The $0.31 per share is a 3.3% increase from the previous rate that had been held flat across all four quarters of 2025. Trinity announced the higher payout in December 2025, which coincided with the company’s completion of a strategic restructuring of its railcar investment partnerships with Napier Park. During the Q4 earnings call, management tied the dividend increase to confidence in its business model.
Speaking of earnings, the company shared the Q4 and full year 2025 financial report on February 12. The report stated that quarterly revenue came in at $611.2 million, down 3% year over year. This was mainly due to lower external deliveries in the Rail Products Group, and partially offset by higher lease rates and increased maintenance‑services revenue.
Quarterly EPS from continuing operations were $2.31, up from $0.38 a year earlier and well above the consensus estimate of $0.70. The growth was driven by higher lease rates, gains on lease‑portfolio sales, lower administrative expenses and a $194 million non‑cash pretax gain from the restructuring of a railcar partnership, noted management.
Trinity Industries, Inc. is a US industrial company focused on rail transportation products and services. It manufactures and leases freight railcars, including tank cars, boxcars, covered hoppers, and gondolas, while also providing railcar maintenance and management services through its TrinityRail platform.
6. Canadian Pacific Kansas City Limited (NYSE:CP)
Stock Upside: 10.21%
Number of Hedge Fund Holders: 54
Canadian Pacific Kansas City Limited (NYSE:CP) is one of the best railroad stocks to buy according to analysts. On March 12, Canadian Pacific Kansas City Limited said 14 new Site Ready rail-served industrial development locations had received certification. The sites are spread across North America.
This certification is part of the company’s broader Room to Grow commercial strategy to attract manufacturers, logistics operators, and supply chain partners to its network. Six states in the US, three Canadian provinces, and two Mexican states host these development sites. They collectively unlock more than 6,600 acres of immediately developable land, noted Canadian Pacific Kansas City, or CPKC. This means that businesses can break ground without waiting through the lengthy pre-permitting and rail connection approval process that typically adds months to industrial project timelines.
This announcement more than doubles CPKC’s existing footprint in the Room to Grow program. The railway had just eight Site Ready locations before this batch, and now counts 22 certified sites across its tri-national network. Each certified location was developed in partnership with Burns & McDonnell, a global engineering and construction firm. CPKC stated that each site comes pre-approved for rail service connection with proximity to major markets, ports, and distribution hubs.
John Brooks, CPKC’s Executive Vice-President and Chief Marketing Officer, framed the expansion as a direct customer support tool. He stated: “Each certified location is designed to streamline development, accelerate timelines and create new value for both business and communities through unparalleled rail connectivity.”
Canadian Pacific Kansas City Limited is a North American freight rail company. It operates a rail network of approximately 20,000 miles that spans Canada, the United States, and Mexico. The network transports bulk commodities, intermodal containers, automotive products, and energy resources.
5. Canadian National Railway Co. (NYSE:CNI)
Stock Upside: 10.75%
Number of Hedge Fund Holders: 34
Canadian National Railway Co. is one of the best railroad stocks to buy according to analysts. On March 5, Canadian National Railway Co. reported its best February on record for grain movement. Canadian National Railway, or CN, shipped more than 2.67 million metric tons of grain out of Western Canada during the month. This volume beat the previous February record set in 2021.
According to CN, the blowout February performance builds on another robust month before, when the company reported its second-best January on record for grain movement. The company detailed that the February grain volumes were up 15% year over year.
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Separately, on March 4, CN unveiled two specially painted commemorative locomotives from its Homewood, Illinois, facility as part of its America250 celebrations. This is in anticipation for the upcoming 250th anniversary of US independence later this year on July 4.
The company said the two locomotives will enter active freight service immediately. It added that the locomotives are designed to symbolize the dual pillars of the American story, which are independence and innovation. The locomotives will travel across the company’s US rail network throughout 2026, covering routes from the Gulf Coast through the Midwest and into the Great Lakes region.
Canadian National Railway Co. is a Canadian freight rail company. It operates a rail network of about 20,000 route miles across Canada and the United States. The company transports commodities such as petroleum, chemicals, grain, forest products, coal, and automotive goods.
4. Union Pacific Corporation (NYSE:UNP)
Stock Upside: 13.49%
Number of Hedge Fund Holders: 99
Union Pacific Corporation (NYSE:UNP) is one of the best railroad stocks to buy according to analysts. On March 19, Evercore ISI upgraded Union Pacific Corporation to Outperform from In Line and raised its price target slightly to $262 from $260. The firm highlighted Union Pacific’s strong volume growth, robust margins, and noted that the railroad trades at a discount compared to nearly all peers. Analysts expect performance to remain solid, particularly once tough intermodal comparisons are behind it.
Evercore ISI also pointed to the pending merger application, expected in about six weeks, as a potential upside catalyst. If the merger does not proceed, the stock could still deliver low-to-mid teens upside organically. If the merger gains traction toward closing, Union Pacific could be viewed as a premier growth industrial stock, with synergy-driven earnings expansion over the next three to four years.
On March 5, Reuters reported that US railroads, including Union Pacific Corporation, CSX, and BNSF, are moving to recapture freight that shifted to truckers in recent years. The companies believe that shrinking truck capacity and sharply rising road-haul rates have swung the competitive pendulum back toward rail, said Reuters.
The report noted that for several years, an oversupply of trucking capacity kept road rates low. This allowed truckers to undercut rail on price and poach intermodal freight that would otherwise have moved by train. That dynamic is now reversing, noted Reuters.
Reuters stated that the primary catalyst of the reversal is a contraction in trucking supply. For instance, smaller carriers, who make up roughly 90% of all US trucking operators, are exiting the market because they are squeezed out by rising fuel and insurance costs and tightening federal regulations on driver licensing and safety. As a result, national van spot rates climbed to $2.43 per mile in February this year, up 20% from last year, said Reuters.
According to Reuters, the data matters because intermodal freight, which is cargo shipped in containers that can move seamlessly between ships, trucks, and trains, is the direct competitive battleground between the two modes, and rail generally needs to offer roughly a 15% cost advantage to pull freight off highways. So, as trucking rates rise, that threshold is now achievable on more routes and even on shorter hauls. Each major railroad is moving quickly to capitalize, Reuters concluded.
Union Pacific Corporation is a US freight rail company. It operates over 32,000 route miles across 23 western states, transporting agricultural products, automotive goods, chemicals, coal, industrial products, and intermodal containers.
3. L.B. Foster Company (NASDAQ:FSTR)
Stock Upside: 15.13%
Number of Hedge Fund Holders: 6
L.B. Foster Company (NASDAQ:FSTR) is one of the best railroad stocks to buy according to analysts. On March 3, L.B. Foster Company announced its fourth‑quarter and full‑year 2025 results in which it reported its highest fourth‑quarter net sales since 2018.
Quarterly net sales were $160.4 million, a 25.1% increase year over year and beating analyst expectations by about 1%. This beat, said management, was driven by stronger sales in the Rail and Infrastructure segments, up 23.7% and 27.3%, respectively.
GAAP earnings per share came in at $0.22, which undershot Wall Street expectations by about 66%. This was mainly due to a higher effective tax rate, the absence of a prior‑year tax valuation‑allowance benefit, and UK pretax losses that were not tax‑effective, noted management.
For the full year 2025, net sales rose 1.7% to $540.0 million, adjusted EBITDA increased 16.4% to $39.1 million, and net income fell to $7.55 million from $42.95 million in FY2024. Management explained that decline was largely because a one‑off tax valuation‑allowance release in the prior year did not recur.
In light of the performance, management gave 2026 guidance of roughly 3.7% sales growth and adjusted EBITDA expansion of 10%-11%. It also anticipates free cash flow to touch $20 million, capital expenditures to rise to about 2.7% of sales, and leverage to stay within a disciplined 1.0x-1.5x range.
L.B. Foster Company is a US manufacturing and distribution company serving the rail and infrastructure sectors. It provides rail products such as trackwork, rail joints, friction management systems, and rail technologies, along with services for construction and energy markets.
2. GATX Corporation (NYSE:GATX)
Stock Upside: 28.70%
Number of Hedge Fund Holders: 24
GATX Corporation (NYSE:GATX) is one of the best railroad stocks to buy according to analysts. On February 19, GATX Corporation shared its Q4 and full‑year 2025 earnings, where it reported higher net income and EPS, a dividend increase, and a new $300 million share‑repurchase authorization.
Fourth‑quarter revenue was $449 million, which was well ahead of the $443.7 million consensus forecast. Management said the beat came on the back of higher lease revenue and gains on asset dispositions.
Quarterly diluted EPS reached $2.66 and surpassed Wall Street’s expectations by about 0.8%. This reflects higher segment profit, tax‑adjustment benefits, and the contribution from the Wells Fargo railcar acquisition that closed on January 1, 2026, noted management.
For the full year, revenue totaled $1.74 billion, up about 9.8% year over year. The increase came from growth in rail leasing and engine leasing portfolios, management explained. The EPS was also a blowout, coming in at $9.12, which is a 17% increase year over year. Management said the jump was aided by higher earnings, a $0.37 per‑share positive tax‑adjustment impact, and a $1.3 billion investment volume.
Looking ahead, management expects the FY2026 EPS to fall in the $9.50-$10.10 per diluted share range. Meanwhile, the company’s board raised the quarterly dividend by 8.2% to $0.66 per share. The payout will be distributed on March 31, 2026.
GATX Corporation is a US railcar leasing company. It owns, leases, and manages a fleet of tank cars, freight cars, and locomotives, serving customers across industries such as chemicals, petroleum, agriculture, and manufacturing.
1. FreightCar America, Inc. (NASDAQ:RAIL)
Stock Upside: 100.00%
Number of Hedge Fund Holders: 18
FreightCar America, Inc. (NASDAQ:RAIL) is one of the best railroad stocks to buy according to analysts. On March 9, FreightCar America, Inc. announced its Q4 and full‑year 2025 results. Quarterly revenue reached $125.6 million, which means it failed to reach the $160.6 million that analysts expected by a 21.8% margin. Management said during the earnings call that the miss was possible because the quarter’s deliveries included more converted railcars with lower average selling prices compared with the newly manufactured railcars of Q4 FY2024.
EPS for the quarter was $0.16, which also fell short of the $0.17 consensus estimate. For this, management attributed the miss to a higher effective tax rate and the absence of a prior‑year tax‑valuation‑allowance benefit.
The full year revenue totaled $501.0 million, a 10.4% year over year decline. Management said the underperformance reflects fewer railcar deliveries (4,125 vs 4,362) and a shift toward lower‑price conversion builds. But EPS rose to $1.09 compared with a loss of $3.12 in FY2024. This was aided by a $51.9 million release of a deferred‑tax valuation allowance and an improved gross margin, which was 14.6% for FY2025 and 12.0% for FY2024.
For FY2026, the company issued guidance of 4,000-4,500 railcar deliveries, $500-$550 million in revenue, and $41-$50 million of adjusted EBITDA.
FreightCar America, Inc. is a US railcar manufacturing company. It designs and builds freight railcars such as coal cars, covered hoppers, flat cars, and intermodal equipment, with production facilities in the Midwest.
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